*Debt funds: If these funds are held for less than 3 years, withdrawals will be considered as income, and will be taxed according to the investor's tax slab. If these funds are held for more than 3 years, long term capital gains will be taxed at 20% after indexation. *Equity funds: if these funds are held for less than a year, withdrawals will be taxed at 15%. if they are held for more than a year, long term capital gains will be taxed at 10% over and above 1 Lakh.